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KSS Kohl`s

Filed: 2 Mar 21, 7:01am

Exhibit 99.1

Kohl’s Reports Financial Results

 

  

Fourth quarter diluted earnings per share of $2.20; adjusted diluted earnings per share(2) of $2.22, including $1.15 per share of incremental tax benefit driven by tax planning strategies

 

  

Further strengthened financial position during the fourth quarter, ending with $2.3 billion in cash

 

  

Expects full year 2021 net sales to increase in the mid-teens percentage range as compared to 2020, operating margin to be in the range of 4.5% to 5.0% and earnings per share to be in the range of $2.45 to $2.95

 

  

Resuming capital allocation strategy in 2021, including increasing capital expenditures, reinstating dividend, resuming share repurchase program, and employing liability management strategies

MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—March 2, 2021—Kohl’s Corporation (NYSE:KSS) today reported results for the quarter and year ended January 30, 2021.

 

   Three Months  Twelve Months 

($ in millions, except per share data)

  2020  2019  Change  2020  2019  Change 

Total revenue

  $6,141  $6,832   (10.1)%  $15,955  $19,974   (20.1)% 

Net sales(1)

   (10.1)%   0.0   (20.4)%   (1.5)%  

Gross margin

   32.0  32.7  (73)bps   31.1  35.7  (464)bps 

Selling, general, and administrative expenses

  $1,603  $1,742   (8.0)%  $5,021  $5,705   (12.0)% 

Reported

       

Net income (loss)

  $343  $265   29 $(163 $691   (124)% 

Diluted earnings (loss) per share

  $2.20  $1.72   28 $(1.06 $4.37   (124)% 

Non-GAAP(2)

       

Adjusted net income (loss)

  $346  $308   12 $(186 $769   (124)% 

Adjusted diluted earnings (loss) per share

  $2.22  $1.99   12 $(1.21 $4.86   (125)% 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(1)

Represents change in Net sales vs. prior year period.

(2)

Excludes Impairments, store closing, and other costs, (Gain) on sale of real estate, and (Gain) on extinguishment of debt.

“After an extraordinary year managing through the pandemic, we ended the year in a very solid financial position, and we enter 2021 with strong momentum. We are pleased with the progress we are making against our strategic initiatives and we are set up to deliver a multi-year improvement in sales and operating margin. Several newly announced initiatives will come to life for our customers in the year ahead, most importantly the launch of our Sephora partnership in August,” said Michelle Gass, Kohl’s chief executive officer.

“We are committed to driving shareholder value and based on our strong financial outlook we are resuming our capital allocation strategy in 2021,” said Gass.

2021 Financial Outlook

The Company currently expects full year 2021 net sales to increase in the mid-teens percentage range as compared to the prior year, operating margin to be in the range of 4.5% to 5.0%, and earnings per share to be in the range of $2.45 to $2.95, excluding any non-recurring charges.

2021 Capital Allocation Strategy

The Company plans to resume its capital allocation strategy in 2021, including increasing capital expenditures, reinstating dividend, resuming share repurchase program, and employing liability management strategies.

 

  

Capital expenditures: $550 million to $600 million, including the launch of its Sephora partnership, the opening of its sixth e-commerce fulfillment center and store refresh activity

 

  

Dividend: On February 24, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable March 31, 2021 to shareholders of record at the close of business on March 17, 2021.

 

  

Share repurchase program: $200 million to $300 million

Fourth Quarter 2020 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on March 2, 2021. A webcast of the conference call and the related presentation materials will be available via the Company’s web site at investors.kohls.com, both live and after the call.


Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause the Company’s actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K, and in Item 1A of Part II in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and Kohl’s undertakes no obligation to update them.    

In this press release, the Company provides information regarding adjusted net income (loss) and adjusted diluted earnings (loss) per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net income (loss) and adjusted diluted earnings (loss) per share is provided in this release. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.

About Kohl’s

Kohl’s (NYSE: KSS) is a leading omnichannel retailer. With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl’s App, Kohl’s offers amazing national and exclusive brands at incredible savings for families nationwide. Kohl’s is uniquely positioned to deliver against its strategy and its vision to be the most trusted retailer of choice for the active and casual lifestyle. Kohl’s is committed to progress in its diversity and inclusion pledges, and the company’s environmental, social and corporate governance (ESG) stewardship. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com or follow @KohlsNews on Twitter.

Contacts

Investor Relations:

Mark Rupe, (262) 703-1266, mark.rupe@kohls.com

Media:

Jen Johnson, (262) 703-5241, jen.johnson@kohls.com


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended  Twelve Months Ended 

(Dollars in Millions, Except per Share Data)

  January 30,
2021
  February 1,
2020
  January 30,
2021
  February 1,
2020
 

Net sales

  $5,879  $6,537  $15,031  $18,885 

Other revenue

   262   295   924   1,089 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total revenue

   6,141   6,832   15,955   19,974 

Cost of merchandise sold

   4,000   4,400   10,360   12,140 

Gross margin rate

   32.0  32.7  31.1  35.7

Operating expenses:

     

Selling, general, and administrative

   1,603   1,742   5,021   5,705 

As a percent of total revenue

   26.1  25.5  31.5  28.6

Depreciation and amortization

   218   232   874   917 

Impairments, store closing, and other

   4   57   89   113 

(Gain) on sale of real estate

   —     —     (127  —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Operating income (loss)

   316   401   (262  1,099 

Interest expense, net

   70   50   284   207 

(Gain) on extinguishment of debt

   —     —     —     (9
  

 

 

  

 

 

  

 

 

  

 

 

 

Income (loss) before income taxes

   246   351   (546  901 

(Benefit) provision for income taxes

   (97  86   (383  210 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss)

  $343  $265  $(163 $691 
  

 

 

  

 

 

  

 

 

  

 

 

 

Average number of shares:

     

Basic

   154   154   154   157 

Diluted

   156   154   154   158 

Earnings (loss) per share:

     

Basic

  $2.23  $1.72  $(1.06 $4.39 

Diluted

  $2.20  $1.72  $(1.06 $4.37 
  

 

 

  

 

 

  

 

 

  

 

 

 

ADJUSTED NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE, NON-GAAP FINANCIAL MEASURES

(Unaudited)

 

   Three Months Ended  Twelve Months Ended 

(Dollars in Millions, Except per Share Data)

  January 30,
2021
  February 1,
2020
  January 30,
2021
  February 1,
2020
 

Net income (loss)

     

GAAP

  $343  $265  $(163 $691 

Impairments, store closing, and other

   4   57   89   113 

(Gain) on sale of real estate

   —     —     (127  —   

(Gain) on extinguishment of debt

   —     —     —     (9

Income tax impact of items noted above

   (1  (14  15   (26
  

 

 

  

 

 

  

 

 

  

 

 

 

Adjusted (non-GAAP)

  $346  $308  $(186 $769 
  

 

 

  

 

 

  

 

 

  

 

 

 

Diluted earnings (loss) per share

     

GAAP

  $2.20  $1.72  $(1.06 $4.37 

Impairments, store closing, and other

   0.03   0.37   0.58   0.71 

(Gain) on sale of real estate

   —     —     (0.82  —   

(Gain) on extinguishment of debt

   —     —     —     (0.06

Income tax impact of items noted above

   (0.01  (0.10  0.09   (0.16
  

 

 

  

 

 

  

 

 

  

 

 

 

Adjusted (non-GAAP)

  $2.22  $1.99  $(1.21 $4.86 
  

 

 

  

 

 

  

 

 

  

 

 

 


KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

  January 30,
2021
   February 1,
2020
 

Assets

    

Current assets:

    

Cash and cash equivalents

  $2,271   $723 

Merchandise inventories

   2,590    3,537 

Other

   974    389 
  

 

 

   

 

 

 

Total current assets

   5,835    4,649 

Property and equipment, net

   6,689    7,352 

Operating leases

   2,398    2,391 

Other assets

   415    163 
  

 

 

   

 

 

 

Total assets

  $15,337   $14,555 
  

 

 

   

 

 

 

Liabilities and Shareholders’ Equity

    

Current liabilities:

    

Accounts payable

  $1,476   $1,206 

Accrued liabilities

   1,270    1,281 

Current portion of:

    

Finance leases and financing obligations

   115    124 

Operating leases

   161    158 
  

 

 

   

 

 

 

Total current liabilities

   3,022    2,769 

Long-term debt

   2,451    1,856 

Finance leases and financing obligations

   1,387    1,367 

Operating leases

   2,625    2,619 

Deferred income taxes

   302    260 

Other long-term liabilities

   354    234 

Shareholders’ equity

   5,196    5,450 
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

  $15,337   $14,555 
  

 

 

   

 

 

 


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Twelve Months Ended 

(Dollars in Millions)

  January 30,
2021
  February 1,
2020
 

Operating activities

   

Net (loss) income

  $(163 $691 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

   

Depreciation and amortization

   874   917 

Share-based compensation

   40   56 

Deferred income tax expense

   18   51 

Impairments, store closing, and other costs

   64   64 

(Gain) on extinguishment of debt

   —     (9

(Gain) on sale of real estate

   (127  —   

Non-cash inventory costs

   187   —   

Non-cash lease expense

   149   150 

Other non-cash expense

   22   11 

Changes in operating assets and liabilities:

   

Merchandise inventories

   768   (51

Other current and long-term assets

   (813  48 

Accounts payable

   270   19 

Accrued and other long-term liabilities

   199   (134

Operating lease liabilities

   (150  (156
  

 

 

  

 

 

 

Net cash provided by operating activities

   1,338   1,657 
  

 

 

  

 

 

 

Investing activities

   

Acquisition of property and equipment

   (334  (855

Proceeds from sale of real estate

   197   —   

Other

   —     18 
  

 

 

  

 

 

 

Net cash used in investing activities

   (137  (837
  

 

 

  

 

 

 

Financing activities

   

Proceeds from issuance of debt

   2,097   —   

Deferred financing costs

   (19  —   

Treasury stock purchases

   (8  (470

Shares withheld for taxes on vested restricted shares

   (22  (31

Dividends paid

   (108  (423

Reduction of long-term borrowings

   (1,497  (6

Finance lease and financing obligation payments

   (105  (113

Proceeds from stock option exercises

   —     1 

Proceeds from financing obligations

   9   11 
  

 

 

  

 

 

 

Net cash provided by (used in) financing activities

   347   (1,031
  

 

 

  

 

 

 

Net increase (decrease) in cash and cash equivalents

   1,548   (211

Cash and cash equivalents at beginning of period

   723   934 
  

 

 

  

 

 

 

Cash and cash equivalents at end of period

  $2,271  $723